Cell phones are a consumer market. Whether you realize it or not, we (the consumer) sets the price by what we are willing to pay. Others have already stated this, and it rings true for most of the personal electronics products we use today.

Supply and demand, which offers incentive to those who innovate being first to market with a new idea, is what drives the market.

That is more because of a lack of software than anything else isn't it? I am pretty sure that there is more than enough power in a top end smartphone to do any of those tasks....

They lack power. Period. x86 architecture has been always more powerful than ARM, but more power hungry too, the RAZRi and the XOLO finally have an x86 processor of only one core with HT (2 threads) and they are comparable to dual core and quad core ARM processors while also retaining very nice battery. this is not a problem in laptops nor desktops, that's why they are way above smartphones.